GM plans on continued sales increase with new products

General Motors Co. is poised for a major breakout that will transform the company over the next 18 months.

Mark Reuss, president of GM's North American Operations, said during a conference call Thursday GM currently has what he described "as the oldest product line" in the industry now.

But GM is more than holding its own despite its aging fleet of trucks and cars, It's average transaction prices -- the amount consumers are willing to pay for a GM vehicle -- have actually gone up this year.

In addition, GM's sales incentives, while they have increased this year, are not out of line with those offered by competition and the company's North American operations are profitable, he said.

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Meanwhile, GM has several new products, including pickup trucks, sport utility vehicles and new crossover vehicles, including cars such as a new Corvette, that will reach showrooms in the next several months.

"Our product portfolio is now the oldest in the industry," he said. But as the new products reach showrooms, the company's position will improve, said Reuss, who was put in charge of the company's business in 2009 as GM emerged from bankruptcy.

"We're going to have the biggest change in our product portfolio in our history. It's a huge opportunity for us," said Reuss, who said GM was already challenging Asian brands in segments where fuel efficiency is of primary importance.

"It's a huge opportunity for us," he said. "We want both market share and profits," he said.

"All four GM brands increased their sales year over year in December, and we were strong across the board in cars, crossovers and pickup trucks," said Kurt McNeil, vice president of U.S. sales operations.

"We also achieved an important fuel economy milestone. In December, GM became the first U.S. auto maker to sell more than 1 million vehicles in a single year that get an EPA-estimated 30 mpg or better on the highway."

For the full year, GM's sales were up 3.7 percent.

Cadillac has posted seven consecutive months of sales increases as their new vehicles, such as the new XTS full-size and ATS compact sedans, begin to find more buyers.

Nonetheless, outside analysts were cautious.

"GM sales volume was up 4.9 percent in December from a year ago, led by passenger car sales. Full-size pickups had their best month since September '08, while average transaction prices rose meaningfully, in our view, with limited changes in incentives versus November. While GM beat Ford's 1.9 percent gain, it lagged Volkswagen AG's 35 percent increase, Toyota's 13 percent and Chrysler's 10 percent increase," Efraim Levy, equity analyst for Standard & Poors Capital.

"In a strong year for the auto industry overall, GM struggled to hold up its end in 2012. Its year-over-year growth is well under the industry average, and the company couldn't hold on to market share gains it enjoyed in 2011," said Jessica Caldwell, a senior analysts at Edmunds.com, which tracks sales and new cars.

Tim Libby, a senior analyst with R.L. Polk in Southfield, also said the competition in the auto industry is very intense right now. After a soft year in 2011, Toyota raised its market share in the United States nearly to 14.4 percent from 12.9 percent.

In addition, all of the top eight manufacturers competing for sales in the United States will be introducing more and more new models over the next 18 months to 24 months, Libby said.

GM said last month it was in the midst of cutting its ties to the U.S. Treasury Department, which since 2009 has held a controlling interest on behalf of U.S. taxpayers.

General Motors plans to spend $5.5 billion to buy back about 40 percent of the U.S. treasury department's stake in the big auto maker.

The share buyback is part of the Treasury's plan, announced Wednesday, to fully exit its entire holdings of GM stock within 12 to 15 months, subject to market conditions.